April 7, 2003---Supreme Court Allows Arbitration of Some HMO Disputes

A unanimous U.S. Supreme Court ruled Monday that two managed-care companies, PacifiCare Health Systems Inc. and UnitedHealth Group Inc., could require certain disputes with physician providers to be arbitrated. The Court reversed the 11th Circuit Court of Appeals, which had ruled against arbitration agreements in physicians’ contracts because the arbitration provisions did not appear to allow punitive or triple damage awards. Such damages are an important aspect of RICO claims which the physicians have included with other wrongs and fraudulent acts in allegations in the landmark litigation against HMOs underway in federal district court in Miami. Archie Lamb, co-lead counsel for the 14 law firms representing doctors in the class-action case, said the Supreme Court ruling was "very narrow" and did not weaken the more powerful claims of a "conspiracy in the managed-care industry" to limit payment to doctors. For a detailed article in today’s Los Angeles Times, please go to www.latimes.com .